6  City of Lynchburg Housing Market Analysis

The following provides an analysis of major trends impacting housing within the City of Lynchburg.

6.1 Takeaways

  • Growth in the city has been a result of international migration and natural increases.
  • Once 44 percent renter households, the city is now majority renter households at 51 percent.
  • There has been a loss of homeowners in the city, mainly among those households aged 25 to 64 years old.
  • The number of higher income households is growing in the city, even among renters, but there is also a growing number of extremely low-income renters.
  • In spite of its urban environment, housing in the city is dominated by single-family housing.
  • Homeownership is declining as prices have climbed rapidly during the pandemic.
  • Large amount of detached single-family rentals, especially in College Hill and Diamond Hill areas.
  • Rental prices have remained generally flat among multifamily properties, but cost burden among renters has continued to rise.

6.5 Housing stock

Lynchburg contributes to 28 percent of the region’s total housing stock in 2021. Most of that contribution is composed of single-family housing that is in the homeownership stock. Despite it’s urban environment, the homeownership stock in the city is not diverse and very few duplexes and other smaller housing types are not utilized for homeownership.

Rather, diverse housing is largely used for rental housing. Most of the rental housing stock in the city is made up of single-family and medium-scale multifamily (5 to 19 units).

Figure 6.12: Distribution of housing stock in Lynchburg in relation to the region

Manufactured home communities exist within the city limits, mainly on the outskirts along major thoroughfares. Six of the eleven communities are located along or in proximity to Lakeside Drive in the western end of the city.

Figure 6.13: Map of manufactured home communities in Lynchburg

The majority of communities are small, consisting of fewer than 50 homes. Although not as prevalent as in the counties, manufactured home communities also provide an affordable housing option within the city.

Figure 6.14: Manufactured home communities by size in Lynchburg

Residential building permits display the dominance of single-family construction within the city for much of the past two decades. Recovery from the Great Recession has still yet to come to the city, but the construction of five or more unit buildings in the city has continued to surpass all other types in recent years. Although the city saw the construction of duplexes and triplexes early on in the 2000s, there have been little to no construction of this type of housing in the city.

Figure 6.15: Residential building permits by unit type in Lynchburg

6.6 Homeownership market

As the number of renters has been increasing in the city, the homeownership rate has continued to drop. From 56 percent in 2010 to 49 percent in 2021, the city is now majority-renter.

Figure 6.16: Homeownership rate in Lynchburg

As the homeownership rate has declined, home prices have been on the rise. The pandemic had a profound impact on the homeownership market in the city. The median home price increased by 10 percent from 2019 to 2020 and by 2022, the price had reached $240,000, an overall 22 percent increase from 2019. Previously, the city was seeing increases closer to one percent before the pandemic.

Figure 6.17: Lynchburg median home sales price

Closed home sales increased slightly during the pandemic reaching a high of 191 homes sold in the June 2021. Despite the high demand produced by record low interest rates, the number of homes for sale in the city did not increase significantly.

Figure 6.18: Lynchburg closed home sales

The demand in the city is exemplified by the average days on market, which was already trending downward ahead of the pandemic. But ever since the start of the pandemic, the average days on market has generally not exceeded more than 30 days.

Figure 6.19: Lynchburg average days on market

From 2016 through 2022, homes sales in the city have been concentrated in the Perrymont and Fort Hill neighborhoods. There have also been a large number of home sales at the southern edge of the city along Timberlake Road.

Figure 6.20: Map of home sales in Lynchburg from 2016 through 2022

6.7 Rental market

Like the counties, rents in the city have been relatively flat from 2015 to 2020. From 2020 onward, there were bumps in the market asking rent that led to a high of $1,106 in the second quarter of 2022. But average market asking rent has been in decline since then and sat at $1,046 by the end of 2022, the lowest average rent over the course of seven years.

Figure 6.21: Quarterly average market asking rent in Lynchburg

It is important to note that CoStar data excludes a significant amount of single-family detached rentals, which has been growing in demand across the nation. In the city, there is an estimated 4,922 single-family homes that are being used as rentals. A majority of the detached SFR is located in Ward II, where the College Hill and Diamond Hill neighborhoods are located.

Rental prices for these are not easily discerned, as this type of housing is sometimes marketed on non-traditional channels, like Facebook groups or simply with a yard sign.

Figure 6.22: Map of single-family detached rentals in Lynchburg
Figure 6.23: Single-family detached rentals by Lynchburg ward

As of early 2023, there were a total of 3,651 assisted rental units in the city. While assisted units can be supported by multiples types of federal subsidy, the bulk of these units (35 percent) are supported by the Low-Income Housing Tax Credit (LIHTC) program. They are followed by project-based Section 8 at 1,201 units.

Note

Add information about the status of public housing in Lynchburg.

Figure 6.24: Federally-assisted rental homes in Lynchburg by subsidy

As a major portion of Lynchburg’s affordable housing stock, LIHTC is potentially at-risk due to expiring affordability commitments. By 2035, over 40 percent of active LIHTC units are set to exit their affordability commitment period. These properties would need to obtain an additional allocation of tax credits to maintain affordability. While nonprofit owner/operators will seek to maintain affordability, for-profit owners are more likely to convert their properties to market rate.

Figure 6.25: LIHTC units by affordability commitment expiration in Lynchburg
Figure 6.26: Rental housing gap by AMI in Lynchburg
Figure 6.27: Housing Choice Voucher utilization in Lynchburg

6.8 Affordability

In 2021, there was a total of 8,875 cost-burdened households in the city, 75 percent of which were renters. Even those the overall total of cost-burdened households in the city has declined by five percent, that decline has been mainly among homeowner households.

The number of cost-burdened renter households has increased in the last decade from 5,380 to 6,663, a 24 percent increase.

Figure 6.28: Lynchburg cost burden by tenure
Figure 6.29: Lynchburg cost burden by race and ethnicity